The American Interest
Analysis by Walter Russell Mead & Staff
Californians Back Higher Taxes

Over the next few days, Via Meadia will be keeping track of the most significant ballot initiatives that passed or were defeated on Tuesday. One of the biggest was in California, where voters endorsed, by a margin of 54-46 percent, a $6 billion tax hike proposed by Governor Jerry Brown. The revenue will ostensibly be used to pay for education, although some believe it will go toward balancing the budget instead. The NYT reports:

Supporters of the plan said it would bring in $6 billion a year over the next seven years through a one-quarter-cent increase in the state sales tax and income tax rate increases for those earning more than $250,000 a year; the increases would last four years and seven years. Without the increases, Mr. Brown warned, California would have to cut $6 billion a year in spending, most of it from its beleaguered public education system.

Critics said that under Mr. Brown’s initiative, the new money would not be earmarked for education but funneled into the general fund and effectively used to help balance the state budget.

Taxes in California are already far higher than in nearby states. Further tax increases will do little to convince the businesses and citizens who have fled the state to return.  

On the other hand, the state budget deficit is notoriously high. Its outsized benefits packages for public employees need to be cut. It’s hard to see how the state can balance its budget without raising more revenue as well.

It shouldn’t be too surprising that a majority supported tax increases on people who have far higher incomes than most voters. The question now is how much longer those affluent Californians will be willing to pay through the nose. 

Published on November 8, 2012 2:45 pm